Used car prices, especially for SUVs, are beginning to decline after years of record highs. Increased inventory, higher interest rates, and slower demand are driving this shift, giving buyers more negotiating power.
This is a comprehensive guide about are used car prices coming down.
Key Takeaways
- Used car prices are trending downward: After peaking in 2022, prices have dropped steadily due to improved supply and reduced consumer demand.
- SUVs are leading the price correction: Popular models like the Honda CR-V, Toyota RAV4, and Ford Escape are seeing the biggest price reductions.
- Higher interest rates are cooling demand: With auto loan rates above 7%, many buyers are delaying purchases, pushing dealers to lower prices.
- New car inventory is up, affecting used values: As new SUVs become more available, trade-in values and used prices are dropping.
- Timing matters more than ever: Late summer and early fall are ideal times to buy, as dealers clear out older inventory.
- Private sellers may offer better deals: With fewer buyers in the market, private sellers are more willing to negotiate.
- Certified pre-owned (CPO) SUVs offer value: These vehicles often come with warranties and inspections, making them a smart middle ground between new and used.
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Are Used Car Prices Coming Down?
If you’ve been eyeing a used SUV but held off due to sky-high prices, now might be the time to act. After nearly three years of unprecedented price hikes, the used car market is finally showing signs of cooling—especially for popular SUVs. From compact crossovers to full-size family haulers, prices are beginning to drop across the board. This shift is welcome news for buyers who’ve been priced out of the market since the pandemic.
But what’s behind this change? And is it real, or just a temporary blip? The answer lies in a mix of economic factors, supply chain improvements, and shifting consumer behavior. While prices haven’t returned to pre-2020 levels, they are moving in the right direction. For the first time in years, buyers are gaining leverage. Dealers are more willing to negotiate, and private sellers are lowering their asking prices to attract interest.
Why Are Used Car Prices Dropping?
Several key factors are driving the decline in used car prices, and understanding them can help you time your purchase perfectly.
Improved New Car Inventory
One of the biggest reasons used car prices are falling is the return of new car inventory. During the pandemic, semiconductor shortages crippled production, leading to a shortage of new vehicles. With fewer new cars available, buyers turned to the used market, driving up demand and prices. Now, automakers have largely recovered. New SUV inventory is up significantly—especially for models like the Hyundai Tucson, Subaru Forester, and Mazda CX-5. As new cars become easier to find, the pressure on the used market eases, and prices begin to fall.
Rising Interest Rates Are Cooling Demand
Auto loan rates have climbed sharply over the past two years. As of mid-2024, the average interest rate for a used car loan is over 7%, compared to around 4% in 2021. Higher monthly payments mean fewer buyers can afford to finance a used SUV, even if the sticker price hasn’t changed. This drop in demand forces dealers to lower prices to move inventory. For example, a 2020 Toyota RAV4 that sold for $28,000 in early 2023 might now be listed at $25,500—a significant drop in just over a year.
Increased Used Car Supply
Another factor is the growing supply of used vehicles. As more new cars are sold, trade-ins are flooding the market. Leasing companies are also returning vehicles to dealers as contracts expire. This influx of inventory gives buyers more options and reduces the urgency to buy quickly. Dealers can’t charge premium prices when they have dozens of similar SUVs on the lot. For instance, a quick search on major car listing sites shows dozens of 2019–2021 Honda CR-Vs in the $22,000–$25,000 range—down from $27,000+ just a year ago.
SUVs Are Leading the Price Decline
Among all vehicle types, SUVs have seen the most dramatic price adjustments. These versatile vehicles have been in high demand for years, but the market is finally catching up.
Compact and Midsize SUVs See Biggest Drops
Compact SUVs like the Nissan Rogue, Ford Escape, and Kia Sportage are among the most affected. These models were in high demand during the pandemic due to their fuel efficiency, cargo space, and affordability. Now, with more new models available and higher financing costs, demand has softened. For example, a 2020 Ford Escape with 40,000 miles might have sold for $26,000 in 2022 but now lists for around $22,500. That’s a drop of over 13%.
Luxury SUVs Are Also Losing Value Faster
Even premium brands aren’t immune. Used luxury SUVs like the BMW X3, Mercedes-Benz GLC, and Audi Q5 are depreciating more quickly than in previous years. Buyers who once paid a premium for these vehicles are now finding better deals. A 2019 BMW X3 with 50,000 miles might have cost $38,000 two years ago but now sells for around $32,000. This trend is especially noticeable in urban areas where ride-sharing and remote work have reduced the need for luxury vehicles.
Electric and Hybrid SUVs: A Mixed Picture
Electric and hybrid SUVs tell a slightly different story. While some models like the Toyota RAV4 Hybrid are still holding value well due to fuel efficiency and reliability, others—especially early-generation EVs—are dropping fast. For example, a 2018 Nissan Leaf SUV might have sold for $20,000 in 2022 but now goes for under $15,000 due to battery degradation concerns and newer EV options. Buyers should research battery health and warranty coverage before purchasing older electric SUVs.
How to Take Advantage of Lower Prices
With prices trending down, now is a great time to shop—but you still need to be smart. Here’s how to get the best deal on a used SUV.
Time Your Purchase Right
The best time to buy a used SUV is typically late summer or early fall. Dealers are eager to clear out older inventory before the new model year arrives. You’ll often find deeper discounts and more negotiating room during this period. Avoid holiday weekends and year-end sales events, when prices may temporarily spike due to promotions.
Shop Around and Compare Listings
Don’t settle for the first SUV you see. Use online tools like Kelley Blue Book, Edmunds, and Cars.com to compare prices across dealerships and private sellers. Look for vehicles priced below market average—these are often motivated sellers or dealers trying to move slow inventory. For example, if the average price for a 2020 Subaru Outback is $26,000, a listing at $24,500 with low mileage is worth a closer look.
Negotiate Like a Pro
With more inventory and fewer buyers, dealers are more open to negotiation. Start by researching the vehicle’s fair market value and use that as your baseline. Point out high mileage, minor cosmetic flaws, or outdated features to justify a lower offer. Don’t be afraid to walk away—there are plenty of other SUVs on the market.
Consider Certified Pre-Owned (CPO) Options
If you want peace of mind, consider a certified pre-owned SUV. These vehicles undergo rigorous inspections, come with extended warranties, and often include perks like roadside assistance. While CPO SUVs cost more than non-certified used models, the added protection can be worth it—especially for families or long-distance drivers. Brands like Honda, Toyota, and Hyundai offer strong CPO programs.
Check the Vehicle History Report
Always request a vehicle history report from services like Carfax or AutoCheck. Look for red flags like accidents, flood damage, or multiple owners. A clean history can increase resale value and reduce the risk of costly repairs down the road.
What to Watch Out For
While lower prices are great, not all deals are created equal. Here are a few pitfalls to avoid.
Beware of “Too Good to Be True” Listings
Scammers often post fake listings at unrealistically low prices to lure buyers. If a 2021 Toyota RAV4 is listed for $18,000—$7,000 below market value—it’s likely a scam. Always verify the seller’s identity, meet in person, and inspect the vehicle before handing over any money.
Watch for High Mileage and Wear
Lower prices sometimes come with higher mileage or deferred maintenance. A used SUV with 80,000+ miles might seem like a bargain, but it could need new tires, brakes, or a transmission soon. Factor in potential repair costs when comparing prices.
Financing Costs Can Offset Savings
Even if the price is lower, high interest rates can eat into your savings. A $25,000 SUV financed at 8% over 60 months will cost you over $5,000 in interest. Shop around for the best loan rates—credit unions often offer lower rates than banks or dealerships.
The Road Ahead for Used SUV Prices
Experts predict that used car prices will continue to decline gradually through 2024 and into 2025. However, they’re unlikely to return to pre-pandemic levels due to inflation, higher production costs, and strong long-term demand for SUVs. That said, the market is becoming more balanced. Buyers who were priced out in recent years now have a real chance to find a quality used SUV at a fair price.
Conclusion
Yes, used car prices are coming down—especially for SUVs. Thanks to improved new car inventory, higher interest rates, and increased used supply, the market is finally shifting in favor of buyers. While prices aren’t back to 2019 levels, the downward trend offers real opportunities for smart shoppers. By timing your purchase, comparing listings, and negotiating effectively, you can drive away in a reliable used SUV without breaking the bank. The key is to stay informed, be patient, and act when the deal feels right.
Frequently Asked Questions
Are used car prices really dropping in 2024?
Yes, used car prices have been declining since early 2023 and continue to fall in 2024. Improved supply and higher interest rates are reducing demand, especially for popular SUVs.
Which SUVs are seeing the biggest price drops?
Compact and midsize SUVs like the Honda CR-V, Toyota RAV4, and Ford Escape are experiencing the most significant price reductions, with some models down 10–15% from peak prices.
Is now a good time to buy a used SUV?
Yes, now is a good time to buy. Prices are lower, inventory is up, and dealers are more willing to negotiate—especially in late summer and early fall.
Will used car prices keep falling?
Prices are expected to decline gradually through 2024, but they likely won’t return to pre-pandemic levels due to inflation and ongoing demand for SUVs.
Should I buy a used SUV from a dealer or private seller?
Both have pros and cons. Dealers offer warranties and financing, while private sellers may offer lower prices. Always check the vehicle history and inspect the SUV before buying.
Are certified pre-owned SUVs worth the extra cost?
Yes, if you value peace of mind. CPO SUVs come with inspections, warranties, and often roadside assistance, making them a smart choice for long-term reliability.